I am requesting your signature to join the more than 150 economists and concerned citizens who have already signed this petition to repeal the anti-price gouging laws. These laws prevent market prices from adjusting to changes in demand, such as the spike in demand for N-95 masks, and are the principal cause of all of the shortages we are experiencing, including the life-saving “PPE” (personal protection equipment) such as the masks, gowns, and gloves that our front-line medical professionals need, to everyday food products and even toilet paper!

This is “Economics 101”; it is a non-controversial topic taught in first-semester economics classes, but our political leaders do not understand it. Price controls cause shortages, and anti-price gouging laws are a form of price control and the cause of these shortages.

This petition is directed primarily to economists, but I encourage anyone with a background in finance, political science, or who is simply a concerned citizen to sign this petition.

I am delivering this petition to the governors of the 36 states with anti-price gouging laws, key members of state legislators, and to President Trump and members of Congress.

“PETITION: REPEAL THE ANTI-PRICE GOUGING LAWS TO ENSURE OUR HEALTH AND SAFETY DURING THIS CORONAVIRUS EPIDEMIC

We, the undersigned economists, implore the governors and legislatures of the 36 states with anti-price gouging laws to repeal or temporarily suspend them during this coronavirus emergency.

All of these laws are a form of price control, and they cause the shortages of the very products that can ensure our health and survival during this coronavirus epidemic, such as masks, sanitizers, gloves, testing kits, and other essential medical, hygiene, and food supplies.

Doctors and hospitals are having difficulty getting enough masks and gloves. And these shortages are spreading. Entire sections of grocery stores are being cleaned out as people panic-buy for fear of new shortages. Even toilet paper cannot be found in many stores!

None of this had to happen, and it can still end with vital medical supplies and abundance returning to the stores, if elected officials do one thing: repeal or, at a minimum, temporarily suspend the anti-price gouging laws.

The anti-price gouging laws interfere with the working of the most fundamental principle in economics: the Law of Supply and Demand. This Law holds that when market prices are free to adjust to reflect changes in supply and demand conditions, markets will clear; there will be no shortages (or if one temporarily arises, it will quickly subside).

This is a basic principle learned in any introductory economics class, yet it is a lesson forgotten in statehouses and courtrooms and homes and businesses across the country.

Americans need to accept that market prices reflect actual supply and demand conditions, conditions that cannot be wished away by legislating “fair” prices. When market prices spike higher, it is because there is a greater scarcity of the product in question. This is what happened when, at first, just N-95 face masks began to run out. In the first days of the epidemic, demand spiked for these face masks, but merchants could not raise prices in response, which would have controlled the quantities demanded so that they would match available supplies. Instead, they ran out of masks.

An even greater tragedy occurred on the supply side. Higher prices -- which were forbidden by the anti-price gouging laws -- would have increased the supply of these life-saving goods by signaling to manufacturers higher profits from making these goods. This means that factories could afford to bring on the extra shifts, hire more trucks, pay more for scarce supplies — do all that it takes to meet the extra demand.

Which is better, temporarily higher prices and a greater supply of masks and the other life-saving goods, or being “protected” from “gougers” and having none of these goods at all? That is the choice we face.

We beseech you to repeal or suspend the anti-price gouging laws in this time of emergency. Unleash the power of the market. Our very lives depend on it!”

Raymond C. Niles is a Senior Fellow the American Institute for Economic Research and Assistant Professor of Economics & Management at DePauw University. He holds a PhD in Economics from George Mason University and an MBA in Finance & Economics from the Leonard N. Stern School of Business at New York University. Prior to embarking on his academic career, Niles worked for more than 15 years on Wall Street as a senior equity research analyst at Citigroup, Schroders, and Goldman Sachs, and as managing partner of a hedge fund investing in energy securities.